Environmental Economics


The Promenade Bolingbrook, a Forest City sustainable shopping center in Bolingbrook, Ill., obtained LEED certification by building for higher energy efficiency, using eco-conscious building materials, and making a greater commitment to water management and indoor air quality.

Contrary to popular belief, being green doesn’t mean you have to go into the red. It is possible to incorporate sustainability into an existing shopping center without breaking the bank.

“As the green retail sector grows exponentially, more and more building professionals, owners and operators are seeing the economic benefits of making new construction and existing buildings more energy efficient and environmentally friendly,” said Mike Flynn, principal and LEED AP with KTGY Group, Inc., based in Irvine, Calif.

A study prepared by the Heschong Mahone Group showed that more hours of daylight per year in a store are associated with greater effect on sales. Skylighting had the largest impact, boosting sales index by an average of 40%.

“It’s not often that doing the right thing for the planet and doing the right thing for your wallet are the same thing, but that is what is happening with green retail,” Flynn added.

The U.S. Green Building Council (USGBC) recognizes that retail buildings have special challenges. The organization will launch a new version of Leadership in Energy and Environmental Design (LEED) certification, one specifically for retail buildings and retail interiors, in 2009. Much of the work has involved energy use, including heating and cooling systems, because grocery stores and restaurants are “energy-heavy,” said Justin Doak, LEED retail sector manager for the USGBC. One drawback is that technological advancements (such as restaurant grill systems and other appliances) have not progressed as quickly as retailers need them to incorporate them into their operations, Doak explained.

Retail centers with multiple tenants still continue to present challenges from a LEED standpoint.

“The heart of the matter for commercial interior situations is that some of these LEED prerequisites require a good relationship between landlords and tenants. What happens if a retailer wants to recycle but the landlord doesn’t (or vice versa)? That’s why we’re trying to come up with different options for different settings,” Doak noted.

Despite the difficulties, shopping center developers such as Cleveland-based Forest City Enterprises, whose LEED-certified Promenade Boling-brook is shown on the opposite page, and Jacksonville, Fla.-based Regency Centers have announced major sustainable building initiatives for both their existing and new centers.

“Regency is working with the USGBC to create a method for sustainable shopping centers,” said Mark Peternell, Regency Centers’ VP of sustainability.

Regency plans to obtain LEED certification for 20% of its new developments in 2008, 40% of next year’s starts and 60% of new projects thereafter. Other plans include incorporating LEED certification into redevelopment projects.

In promoting sustainability, advocates say, the best approach is the simplest: It is good business.

“If I were making a case to get a retailer to embrace sustainability, I would say that this is one of those very rare instances where doing something beneficial for the environment and doing something beneficial for your bottom line are the same thing,” KTGY Group’s Flynn said. “Sustainable buildings use energy and water more efficiently, and that is going to reduce operating costs.”

According to Flynn, the cost to achieve a level of sustainability comparable to LEED Certified is minimal, usually between 1/2% to 2% in hard cost. But with some pre-planning, the added cost can be driven down.

“If having a green building is a goal from the start of the project, the increased cost can be dropped to almost zero, just by making smart decisions throughout the design process,” he added.

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